Economic Substance Return - DITC

1 Updated Sample ES Return : Pure Equity Holding Company Updated Sample ES Return , Pure Equity Holding Company Information bubbles appear in this column beside the corresponding field. Economic Substance Return For the purpose of this sample PDF, mandatory fields are marked with an * Whereas fields marked with (*) are only mandatory in certain cases. When the form is available on the DITC Portal mandatory fields will automatically display as the form is completed. The International Tax Co-Operation ( Economic Substance ) Law ("ES Law") requires every relevant entity ("Entity") that is carrying on a relevant activity to satisfy the Economic Substance test in relation to that relevant activity ( ES Test ) . Each such Entity must prepare and submit to the Tax Information Authority ( Authority ) an Economic Substance report ( ES Return or this form ) for the purpose of the Authority's determination as to whether the ES Test has been satisfied in relation to that relevant activity.

2 The ES Return must be submitted within twelve months after the last day of the end of each financial year ( Period ) commencing on or after 1 January 2019. If an Entity conducts more than one relevant activity during a financial year then it must prepare and submit a separate ES Return in relation to each such relevant activity. Please refer to the ' Economic Substance For Geographically Mobile Activities Guidance' issued by the Authority for information about the Economic Substance requirements. Please refer to DITC Portal User Guide for further information on this form. All monetary amounts should be provided to the nearest whole number. Zero ("0") will be acceptable for all fields requiring a numerical response. Once the Entity name is selected from the drop down list and the Validate Information button is pressed, the ES Return will pre-populate with certain information for the Entity.

3 Overview Entity Name Validate Information If change to Entity name is required, this will need to be done through the General registry . Relevant Entity ("Entity") Name * Pre-populated Is the Entity a Segregated Portfolio Company ("SPC") and conducts one or more relevant activities through a Segregated Portfolio? * An SPC must specify the SP on whose behalf it is submitting the ES Return in the Segregated Portfolio name box. A separate ES Return must be submitted by the SPC for each SP that is required to file an ES Return . Likewise, an ES Return is required in respect of each relevant activity ( one SP carrying on two relevant activities is required to submit two ES Returns). Alternatively, if an SP is tax resident outside the Islands then the SPC must complete and submit the Tax Resident Outside the Islands form in respect of that SP.

4 Refer to point 19 on the Practice Point Document for more details. YES / NO Segregated Portfolio name (*) INSERT NAME OF THE SP FOR WHICH THIS FORM RELATES TO Period End Date ( end of financial year) specified on ESN Pre-populated from ESN with option to correct Updated Sample ES Return : Pure Equity Holding Company Updated Sample ES Return , Pure Equity Holding Company Period End Date (for purposes of this ES Return ) * The first Period will be the first financial year commencing after the operative date of the ES Laws. The Entity should refer to both the ES Law and The International Tax Co-Operation ( Economic Substance )(Prescribed Dates) Regulations, 2018. YYYY-MM-DD Period Start Date ( start of financial year) * YYYY-MM-DD Period Days Pre-populated Reporting Period Pre-populated Responsible Person Pre-populated from ESN The Responsible Person can only be changed by resubmitting the ESN via CAP.

5 The Responsible Person may appoint secondary users on the DITC Portal. IN: General registry Number Pre-populated from ESN If change to GR number is required, this will need to be done through General registry . TIN This field is always pre-populated with "NOTIN" on the ES Return because the Islands do not issue Tax Identification Numbers. Pre-populated - NOTIN Type Income: Relevant Activity * The relevant activity is pre-populated to reflect the selection made on the ESN (or first one stated if more than one) but can be amended here. If the Entity has more than one relevant activity then it must select one relevant activity for the purpose of this ES Return and complete a separate ES Return for each one of its relevant activities.

6 Holding Company Business Intellectual Property Business Distribution and Service Centre Business Banking Business Fund Management Business Insurance Business Headquarters Business Financing and Leasing Business Shipping Business None Confirm the Entity met the definition of a "Pure Equity Holding Company" as outlined in the ES Law for the Period * The ES Law provides that a pure equity holding company means a company that only holds equity participations in other entities and only earns dividends and capital gains. Where No is selected the Entity will skip to Other section below. YES / NO Relevant Income Currency used to complete this ES Return . * The Entity must use one currency for all financial data in the ES Return .

7 USD etc. Annual Income: Total income for the Period. * The OECD NTJ schema uses the term "Annual Income". This element should contain the total annual gross income of the Entity ( not limited to relevant income). Insert Monetary Amount Gross Income: Total relevant income for the Period. * The OECD NTJ schema uses the term "Gross Income". The ES Law defines relevant income as follows; "relevant income , in relation to an Entity, means all of that Entity s gross income from its relevant activities and recorded in its books and records under applicable accounting standards. For the avoidance of doubt, relevant income for the purposes of the ES Law is gross income and not accounting income/profit. Gross income is equal to gross receipts/gross revenue, whether in the form of cash or property, which Insert Monetary Amount Updated Sample ES Return : Pure Equity Holding Company Updated Sample ES Return , Pure Equity Holding Company the Entity derived from its pure equity holding company business.

8 Type of Income: Total dividend income for the Period * Insert Monetary Amount Total capital gains for the Period * Insert Monetary Amount Total incidental income for the Period * For example, incidental interest earned on a bank account. Please refer to Holding Company Sector Specific Guidance for further detail. Insert Monetary Amount Entity Details: Legal Address Type * Residential or Business Residential Business Registered office Unknown Country Code * Country code selected should be the country the address relates to. Street Building Identifier Suite Identifier Floor Identifier District Name Post Office Box Post Code City * Country Subentity For example; province or state.

9 Address Free Address Free allows the input of address information in free text. It should only be used in exceptional circumstances when it is impossible to provide the address in the fixed format. Status Pre-populated from General registry Date ceased to be active Pre-populated from General registry Is the Entity a constituent entity of an MNE Group for the purposes of the Country-by-Country reporting (CbCR) framework * Yes / No Name Group: Name of MNE Group, if different from Entity name Updated Sample ES Return : Pure Equity Holding Company Updated Sample ES Return , Pure Equity Holding Company Immediate Parent Details: Immediate Parent is defined in the Schedule to the ES Law. All fields relating to an Immediate Parent must be completed for each one.

10 How many Immediate Parents does the Entity have? * ADD Use the ADD button for each Immediate Parent. This information is required under the ES Law. If UNKNOWN is selected please provide explanation in Other section below. UNKNOWN Name of entity * NONE Entity does not have an Immediate Parent. May be a corporate or a non-corporate entity, for example a partnership. TIN or Similar * This data element provides the tax identification number (TIN) used by the tax administration of the jurisdiction of tax residence of the immediate parent. If the immediate parent does not have a TIN the value NOTIN should be entered. TIN issued by (*) This attribute describes the jurisdiction that issued the TIN. It should be always provided, unless NOTIN is entered in the TIN element.